7177 - Commitment Letter - Commercial Mortgage - Variable …



Phone:

Fax:

Date

Borrower

Attention:

Dear Sirs:

Alberta Treasury Branches has approved and offers financial assistance on the terms and conditions in the attached Commitment Letter.

You may accept our offer by returning the enclosed duplicate of this letter, signed as indicated below, by 4:00 p.m. on or before ________, 20__ or our offer will automatically expire. We reserve the right to cancel our offer at any time prior to acceptance.

Thank you for your business.

Yours truly,

|ALBERTA TREASURY BRANCHES |

|By: | |

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|By: | |

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Accepted this ____ day of _____________, 20___

|Borrower: | |Guarantor: |

|Per: | | |Per: | |

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|Per: | | |Per: | |

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commitment letter

|LENDER: |ALBERTA TREASURY BRANCHES ("ATB") |

|BORROWER: | |

|GUARANTOR: | |

| | |

1. AMOUNT AND TYPE OF FACILITY

a) THE CREDIT FACILITY IS AVAILABLE AS A COMMERCIAL MORTGAGE LOAN (THE "LOAN") TO PROVIDE FIRST-MORTGAGE FINANCING OF THE LANDS AND BUILDINGS LOCATED AT THE PROPERTY LEGALLY DESCRIBED AS _______ AND MUNICIPALLY DESCRIBED AS _______ AND COMMONLY REFERRED TO AS _________(THE "LANDS"). "PROPERTY" MEANS, COLLECTIVELY, THE LANDS, ANY PERSONAL PROPERTY LOCATED THEREON OR RELATED THERETO, ANY RENTS AND OTHER REVENUES GENERATED THEREFROM AND THE BORROWER'S OR GUARANTOR'S INTEREST IN ANY PERMITS, APPROVALS AND CONTRACTS RELATING THERETO, INCLUDING WITHOUT LIMITATION, ANY MANAGEMENT AGREEMENTS, LEASES, AND AGREEMENTS TO LEASE.

b) The Loan is available by way of one draw on or before ________, 20___ or such later date as may be acceptable to ATB. Any amount not drawn down at that date will be cancelled and no longer available to the Borrower. The Loan is non-revolving. Any amount repaid may not be re-borrowed.

c) The maximum amount of the Loan will not exceed the least of:

i) the authorized amount of the Loan, being $__________;

ii) ___% of ATB's evaluation of the current appraised value of the Property; and

iii) that amount (as determined by ATB in its sole discretion) which ATB determines would result in an Initial Debt Service Coverage Ratio (as defined below) for the Property of no less than _____.

"Initial Debt Service Coverage Ratio" means the estimate, for the fiscal [year] immediately following the funding of the Loan, of the ratio of (i) the income generated by the Property, less operating expenses, in such period, determined in accordance with generally accepted accounting principles, to (ii) the scheduled principal and interest payments required hereunder and under any other agreement relating to the Property during such period.

2. INTEREST RATES AND REPAYMENT:

[OPTION 1 VARIABLE RATE DEMAND]

d) INTEREST ON THE LOAN IS PAYABLE AT A VARIABLE RATE PER ANNUM EQUAL TO ____ PERCENT ABOVE THE PRIME LENDING RATE (AS DEFINED BELOW), CALCULATED DAILY AND PAYABLE MONTHLY NOT IN ADVANCE (THE “CONTRACTED RATE”) BOTH BEFORE AND AFTER DEMAND, DEFAULT AND JUDGMENT.

“Prime Lending Rate” means the rate of interest which is established by ATB from time to time to determine the rate of interest charged on Canadian dollar loans and designated, declared or commonly known as its prime lending rate. For greater certainty, the determination by ATB of its prime lending rate and the Contracted Rate at any time will be absolutely binding on the Borrower.

e) The Loan and any interest applicable thereto is payable in full on demand by ATB and ATB may terminate availability thereof (including any undrawn portion) at any time without notice. Notwithstanding the foregoing and without limiting ATB's right to demand repayment of the Loan at any time, until demand is made:

i) [insert if payments are blended payments] the Borrower shall pay interest only on the principal amount of the Loan from the date of advance until _____, 20___ (the “Interest Adjustment Date”);

ii) [insert if payments are blended payments] commencing on the month following the Interest Adjustment Date the Borrower shall make blended payments of $________ per month on the last day of each and every month commencing on _____________, 20__, to be applied firstly to accrued interest and secondly to principal, with the balance of all amounts due under the Loan being due and payable in full on the earlier of demand and ______________________________. Notwithstanding the amount of the monthly blended payments outlined herein, payment amounts are subject to adjustment on notice to the Borrower to ensure the original amortization period of ________ [months/years] is maintained. Such notice(s) will be delivered to the address of the Borrower on file at ATB. Any such notice will be incorporated and form part of this agreement and will have the effect of amending the instalments payable by the Borrower.

iii) [insert if payments are to be principal only] The Borrower shall make principal payments of $________ per [month/quarter] on the last day of each month/quarter] commencing on ________________, 20__, with the balance of all amounts owing hereunder due and payable on the earlier of demand and _______________________.

f) The Loan may be repaid in whole or in part at any time without penalty provided that ATB is given two business days advance notice.

g) Without limiting ATB’s right to demand repayment of the Loan at any time, the Loan shall be subject to periodic review by ATB in ATB’s sole and absolute discretion.

[OPTION 2 VARIABLE RATE COMMITTED]

a) INTEREST ON THE LOAN IS PAYABLE AT A VARIABLE RATE PER ANNUM EQUAL TO ____ PERCENT ABOVE THE PRIME LENDING RATE (AS DEFINED BELOW), CALCULATED DAILY AND PAYABLE MONTHLY NOT IN ADVANCE (THE “CONTRACTED RATE”) BOTH BEFORE AND AFTER DEMAND, DEFAULT AND JUDGMENT.

“Prime Lending Rate” means the rate of interest which is established by ATB from time to time to determine the rate of interest charged on Canadian dollar loans and designated, declared or commonly known as its prime lending rate. For greater certainty, the determination by ATB of its prime lending rate and the Contracted Rate at any time will be absolutely binding on the Borrower.

h) The term for the Loan is _____ (___) months from the date of advance. The last business day of the term selected is the "Loan Maturity Date".

[insert if blended payments] The Borrower shall pay interest only on the amounts of the Loan outstanding from the respective date of such advance up to and including _________________, 20___ (the “Interest Adjustment Date”). Thereafter, the Borrower shall make consecutive monthly blended payments of $______________ on the last business day of each and every month until the Loan Maturity Date upon which all amounts outstanding including all accrued interest will be due and payable in full. The monthly blended payments will be applied firstly to interest and secondly against principal. Notwithstanding the amount of the monthly blended payments outlined herein, payment amounts are subject to adjustment on notice to the Borrower to ensure the original amortization period of ________ [months/years] is maintained. Such notice(s) will be delivered to the address of the Borrower on file at ATB. Any such notice will be incorporated and form part of this agreement and will have the effect of amending the instalments payable by the Borrower.

[insert if payments are principal only] The Borrower shall make principal payments of $___________ per [month/quarter] on the last day of each [month/quarter] commencing _____________, 20___, with the balance of all amounts owing hereunder being due and payable in full on the Loan Maturity Date.

i) The Loan may be prepaid in whole or in part at any time without penalty provided that ATB is given two business days advance notice. Any prepayment of the Loan shall include accrued interest owing to the date of such repayment.

3. FEES:

AS CONSIDERATION FOR THE LOAN, A NON-REFUNDABLE [APPLICATION/COMMITMENT/RENEWAL] FEE OF $_______ IS PAYABLE ON ACCEPTANCE OF THIS OFFER, OF WHICH $_______ HAS ALREADY BEEN PAID.

4. SECURITY DOCUMENTS:

THE SECURITY DOCUMENTS (THE "SECURITY DOCUMENTS") REQUIRED ARE AS FOLLOWS:

j) [If variable rate demand then use(] Variable Rate Demand Mortgage (Form 7184) in the principal amount of $_________ constituting a first fixed charge on the Lands (the “Mortgage”);

k) [If variable rate committed then use(] Variable Rate Committed Mortgage (Form 7179) in the principal amount of $ ______________ constituting a first fixed charge on the Lands (the “Mortgage”);

l) Site Specific Security Agreement providing a security interest over all present and after acquired personal property located at or relating to the Property;

m) General Assignment of Rents and Leases relating to the Property;

n) Specific Assignment of Leases relating to the following leases:

__________________________________;

(insert if applicable)

o) Assignment of Property Management Contract relating to the Property;

p) Guarantee from __________, limited to a principal amount of $_______.

The Security Documents secure all amounts advanced hereunder. All documentation shall be in the form used by ATB and must in all respects be satisfactory to ATB and its solicitors. ATB's solicitors in this transaction are _____________________________.

5. property information:

THE BORROWER REPRESENTS TO ATB THAT:

q) the most recent statements and rent roll relating to the Property and the most recent financial statements relating to the Borrower and any Guarantor provided to ATB are accurate and complete in all material respects;

r) the Borrower is the registered owner of the Property;

s) the [Borrower/Guarantor] is the beneficial owner of the Property;

t) the [Borrower/Guarantor] has good and marketable title thereto, free and clear of any encumbrances, charges or liens;

u) the Security Documents, once granted, will constitute a first priority mortgage and security interest on the Property.

The Borrower covenants that it will not create or permit to exist any mortgage, charge, lien encumbrance or other security interest on the Property or any of its other assets relating to the Property, whether now owned or hereafter acquired, other than those consented to in writing by ATB. At the time of advance of the Loan, each tenant listed in the rent roll must be in possession of its leased premises, be carrying on business therein and be paying rent pursuant to the terms of its lease. ATB may at its option require that some or all leases be postponed to the Mortgage.

6. REPRESENTATIONS AND WARRANTIES:

[NOTE: THE DEFINITION OF LOAN PARTIES EXCLUDES INDIVIDUAL GUARANTORS (I.E. NATURAL PERSONS). IF YOU REQUIRE REPRESENTATIONS AND WARRANTIES IN RESPECT OF INDIVIDUAL GUARANTORS, MODIFY ACCORDINGLY.] THE BORROWER AND ANY NON-INDIVIDUAL GUARANTOR (COLLECTIVELY THE “LOAN PARTIES” AND INDIVIDUALLY A “LOAN PARTY”) REPRESENT AND WARRANT TO ATB THAT:

a) if a Loan Party is a corporation, it is a corporation duly incorporated, validly existing and duly registered or qualified to carry on business in the Province of Alberta and in each other jurisdiction where it carries on any material business, including for certainty where the Property is located;

b) if a Loan Party is a partnership, it is a partnership duly created, validly existing and duly registered or qualified to carry on business in the Province of Alberta and in each other jurisdiction where it carries on any material business, including for certainty where the Property is located;

c) the execution, delivery and performance by each Loan Party of this agreement and each Security Document to which it is a party have been duly authorized by all necessary actions and do not violate its governing documents or any applicable laws or agreements to which it is subject or by which it is bound;

d) no event has occurred which constitutes, or which, with notice, lapse of time, or both, would constitute, a breach of any provision of this agreement or any Security Document given in connection herewith; and

e) each Loan Party will maintain and defend title to its property and assets and will continuously carry on its business in a proper, efficient and businesslike manner; and

f) the Borrower and each Guarantor is in compliance in all material respects with all applicable laws and regulations including, without limitation, those relating to the ownership and operation of the Property and those relating to the protection of the environment, and there is no environmental hazard existing on any of its properties and assets or any property adjacent thereto, except to the extent disclosed to and acknowledged by ATB.

7. financial, reporting, INSURANCE AND OTHER obligations:

v) THE BORROWER WILL NOT PERMIT THE DEBT SERVICE COVERAGE RATIO (AS DEFINED BELOW) OF THE PROPERTY TO FALL BELOW ____ IN ANY FISCAL ______.

“Debt Service Coverage Ratio” means, for each fiscal __________________, the ratio of the income generated by the Property, less operating expenses, in such period, determined in accordance with generally accepted accounting principles, to the scheduled principal and interest payments required hereunder and under any other agreement relating to the Property during such period.

w) The Borrower will maintain a separate bank account [with ATB] for the Property into which all funds received from the Property will be deposited and from which all costs relating to the Property will be paid.

x) The Borrower will provide to ATB within 120 days after the end of each of its fiscal years:

i) consolidated financial statements of the Borrower on at least a "review engagement" basis;

ii) a compliance certificate executed by a senior officer of the Borrower in the form attached hereto as Schedule "A", and attaching thereto a rent roll and operating statement of income and expenses for the Property (prepared by an accounting professional on [a review engagement] an in-house basis consistent with CICA standards, and if the Borrower owns multiple properties, representing an excerpt of the same information that was used for the consolidation of the Borrower's results with the exception of consolidation of intercompany transactions);

iii) paid tax bill or other evidence satisfactory to ATB confirming payment of all property taxes then due and payable for the Property;

iv) [insert any required information relating to any Guarantor];

y) The Borrower will provide to ATB within 45 days following the end of each _______, a compliance certificate executed by a senior officer of the Borrower in the form attached hereto as Schedule "A" and attaching thereto a rent roll and operating statement of income and expenses for the Property.

z) The Borrower will provide to ATB on request copies of any leases, lease amendments and lease renewals relating to the Property.

aa) The Borrower will insure and keep insured the Property and its operations against the following perils:

i) loss or damage by fire and other insurable hazards defined in an "all risks" insurance policy for the full replacement cost with provision for permission to occupy and with automatic vacancy permit;

ii) comprehensive boiler and pressure vessel insurance for the full replacement cost or such lesser amount as shall be acceptable to ATB;

iii) business interruption insurance or revenue loss insurance acceptable to ATB for an indemnity period of not less than 12 months and with coverage of not less than 100% of the resulting loss of rent or other revenue received from the operation of the Property; and

iv) public liability insurance on a comprehensive basis to an amount not less than $5,000,000 (or such other amount as shall be acceptable to ATB) on an occurrence basis.

The policies of insurance to be maintained shall not contain any co-insurance clauses and shall be in form and with insurers satisfactory to ATB and shall include the agreement of the insurer that the policy will not be cancelled without at least 30 days prior written notice of intended cancellation to ATB. ATB shall be named in all policies of insurance other than public liability insurance as first loss payee upon the terms of the standard Insurance Bureau of Canada mortgage clause. ATB reserves the right to have any insurance policies reviewed by an independent insurance advisor, at the cost of the Borrower and to require the Borrower to obtain or maintain all such other insurance reasonably required by ATB.

ab) The Borrower covenants with ATB that it will, and will ensure each Guarantor will:

i) pay to ATB when due all amounts (whether principal, interest, any prepayment amounts or other sums) owing by it to ATB from time to time;

ii) pay to ATB on demand, all legal and other costs incurred by ATB in respect of the Loan including the preparation and registration of, and any realization on, the Security Documents and other related matters;

iii) remit when due all sums owing to tax and other governmental authorities (including, without limitation, any sums in respect of employees and GST and any sums due in respect of the Property), and upon request, will provide to ATB such information and documentation in respect thereof as ATB may reasonably require from time to time;

iv) maintain its valid existence as a corporation (in the case of any entities which are corporations);

v) maintain all licenses and authorizations required to permit it to carry on its business, including, any licenses, certificates or permits for the protection of the environment or for the ownership or operation of the Property;

vi) maintain, repair and keep in good working order all of its property and assets;

vii) permit ATB at any reasonable time and on reasonable prior notice to enter its premises and to inspect its property (including the Property), and to examine and copy all of its relevant books of accounts and records;

viii) comply with all applicable laws, permits and regulations, including without limitation, those relating to the ownership and operation of the Property and those relating to the protection of the environment; and

ix) promptly advise ATB in writing, giving reasonable details, of (i) the discovery of any contaminant or any spill, discharge or release of a contaminant into the environment from or upon the Property or any of its other assets, and (ii) any event which constitutes, or which with notice, lapse of time or both, would constitute a breach of any provision hereof or of any Security Documents.

ac) The Borrower covenants with ATB that, without the prior written consent of ATB, it will not:

i) sell, lease or otherwise dispose of the Property, and will not sell, lease or otherwise dispose of any of its other assets except (i) inventory sold, leased or disposed of in the ordinary course of business, (ii) obsolete equipment which is being replaced with equipment of equivalent value, and (iii) assets sold, leased or disposed of during a fiscal year having an aggregate fair market value not exceeding [$100,000] for such fiscal year;

ii) pay to or for the benefit of shareholders, or persons associated or affiliated with shareholders, by way of salaries, bonuses, dividends, management fees, repayment of loans or otherwise, any amount which would cause a breach of a provision hereof;

iii) change the present nature of its business;

iv) amalgamate, consolidate, or merge with any person;

v) consent to or permit a change in the ownership of its shares or allow a material change in its management; and

vi) permit [any Guarantor/any corporate Guarantor] to do any of the matters listed in subsections [] above.

8. environmental and other provisions:

THE BORROWER REPRESENTS TO ATB THAT:

ad) no environmental hazard exists on the Property or on any adjacent land;

ae) no claim, complaint or notice of any action has been made or issued relating to an environmental hazard on the Property; and

af) the Property is being used in compliance with the law.

9. CONDITIONS PRECEDENT TO ADVANCE:

THE LOAN WILL NOT BE AVAILABLE UNTIL THE FOLLOWING CONDITIONS PRECEDENT HAVE BEEN SATISFIED, UNLESS WAIVED BY ATB:

ag) ATB has received, in all cases in form and substance satisfactory to ATB:

i) all Security Documents and confirmation that all registrations and filings have been completed;

ii) all authorizations, financial statements from the Borrower and any Guarantor, appraisals, budgets, environmental reports and any other information that ATB may reasonably require;

iii) payment of all fees due in respect hereof;

iv) evidence that all insurance required by ATB is in place, with ATB shown as first loss payee on any property insurance, and at ATB's option, a satisfactory independent insurance review;

v) a satisfactory final appraisal from a qualified party indicating the present market value of the Property to be not less than $________, together with a letter of transmittal in respect thereof if not specifically addressed to ATB;

vi) a satisfactory independent environmental site investigation prepared by a qualified party with respect to the Property, together with a letter of transmittal in respect thereof if not specifically addressed to ATB;

vii) a satisfactory property condition assessment prepared by a qualified party with respect to the Property, together with a letter of transmittal in respect thereof;

viii) a satisfactory real property report (with evidence of municipal compliance) with respect to the Property if not specifically addressed to ATB;

ix) a clear tax certificate in respect of the Property;

x) copies of all leases, as requested by ATB, respecting the Property; and

xi) estoppel certificates from, at a minimum all major tenants (as defined by ATB) of the Property and other tenants to an aggregate of ____% of leased space.

ah) ATB is satisfied as to the value of the Borrower's and Guarantor's assets and financial condition, and the Borrower's and Guarantor's ability to carry on business and repay any amount owed to ATB from time to time;

ai) ATB's solicitors are satisfied with the results of its searches and due diligence on the Property and the Borrower and any Guarantor;

aj) Borrower and Guarantor are not in default under any agreement, whether or not relating to the Property, relating to indebtedness for borrowed money, or relating to any other agreement if the effect thereof could have a material adverse effect on the Borrower or Guarantor; and

ak) All terms and conditions of this agreement and the Security Documents have been met, and Borrower and Guarantor are not in default thereunder.

10. [If facility is a demand facility (option 1 above) then delete this section] sale of the property, change of control, material adverse change and other defaults:

THE ENTIRE UNPAID BALANCE OF THE LOAN, ACCRUED INTEREST THEREON AND ANY OTHER AMOUNTS OWING HEREUNDER WILL BECOME DUE AND PAYABLE IN THE EVENT:

al) the Borrower sells, conveys, transfers or assigns, or enters into any agreement to sell, convey, transfer or assign, all or any part of its interest in the Property without the prior written consent of ATB;

am) the Borrower or any Guarantor issues, sells or permits the assignment or transfer by any means of all or any part of its shares or other ownership interests resulting in a change in the control of the Borrower or Guarantor unless the entire transaction or series of transactions resulting in the change of control have been approved in writing by ATB;

an) there is a material adverse change in the financial condition, operations, status or business of the Borrower, any Guarantor or the Property;

ao) the Borrower or any Guarantor breaches the provisions of, or defaults in any obligation under, this agreement, whether monetary or otherwise;

ap) the Borrower or any Guarantor defaults in any obligation to any person (other than under this agreement or the Security Documents) which involves or may involve a sum exceeding [$1,000,000], and the default has not been cured within seven (7) days of the date the Borrower first knew or should have known of the default;

aq) final judgment or judgments should be entered against the Borrower or any Guarantor for the payment of any amount of money exceeding $_______ in aggregate, and the judgment or judgments are not discharged within twenty (20) days after entry; or

ar) the Borrower or any Guarantor becomes insolvent or makes a general assignment for the benefit of its creditors or an assignment in bankruptcy or files a proposal or notice of intention to file a proposal under the Bankruptcy and Insolvency Act or otherwise acknowledges its insolvency or if a bankruptcy petition is filed or receiving order is made against it and is not being disputed in good faith.

11. miscellaneous:

as) THE LOAN WILL BE ADVANCED INTO AND REPAID FROM ACCOUNT ______________ AT THE BRANCH OF ATB LOCATED AT ____________________ (THE "BRANCH OF ACCOUNT"), OR SUCH OTHER BRANCH OR ACCOUNT AS THE BORROWER AND ATB MAY AGREE UPON FROM TIME TO TIME. ATB SHALL OPEN AND MAINTAIN AT THE BRANCH OF ACCOUNT ACCOUNTS AND RECORDS EVIDENCING THE ADVANCE OF THE LOAN AND THE PAYMENT OF PRINCIPAL, INTEREST AND FEES AND ALL OTHER AMOUNTS BECOMING DUE TO ATB UNDER THIS AGREEMENT. ATB'S ACCOUNTS AND RECORDS CONSTITUTE, IN THE ABSENCE OF MANIFEST ERROR, CONCLUSIVE EVIDENCE OF THE INDEBTEDNESS OF THE BORROWER TO ATB PURSUANT TO THIS AGREEMENT. THE BORROWER AUTHORIZES AND DIRECTS ATB TO AUTOMATICALLY DEBIT, BY MECHANICAL, ELECTRONIC OR MANUAL MEANS, ANY BANK ACCOUNT OF THE BORROWER FOR ALL AMOUNTS PAYABLE BY THE BORROWER TO ATB PURSUANT TO THIS AGREEMENT.

at) All legal and other costs and expenses incurred by ATB in respect of the Loan, the Security Documents, the operation, enforcement or termination of this agreement and other related matters will be paid or reimbursed by the Borrower on demand by ATB.

au) In the event of any conflict between the provisions of this agreement and those of a Security Document, the provisions of this agreement prevail. The terms of this agreement shall survive the execution and delivery of the Security Documents.

av) ATB shall have the right to assign, sell or participate its rights and obligations in the Loan, in whole or in part, to one or more persons.

aw) Each accounting term used hereunder, unless otherwise defined herein, has the meaning assigned to it under generally accepted accounting principles consistently applied. If there occurs a change in generally accepted accounting principles (an "Accounting Change"), including as a result of a conversion to International Financial Reporting Standards, and such change would result in a change (other than an immaterial change) in the calculation of any financial covenant, standard or term used hereunder, then at the request of Borrower or ATB, Borrower and ATB shall enter into negotiations to amend such provisions so as to reflect such Accounting Change with the result that the criteria for evaluating the financial condition of the Property or of the Borrower or any other party, as applicable, shall be the same after such Accounting Change, as if such Accounting Change had not occurred. If, however, within 30 days of the foregoing request by Borrower or ATB, Borrower and ATB have not reached agreement on such amendment, the method of calculation shall not be revised and all amounts to be determined thereunder shall be determined without giving effect to the Accounting Change.

ax) This agreement shall be governed by the laws of Alberta. Time shall be of the essence in all provisions of this agreement. This agreement may be executed in counterpart.

ay) Unless otherwise specified, references to "$" and "dollars" mean Canadian dollars.

SCHEDULE "A"

To: Alberta Treasury Branches

__________________________

__________________________

Attention: __________________

I, ___________________________________, hereby certify as of the date of this certificate as follows:

1. I am the _____________________ [insert title] of _____________________________________ (the "Borrower") and I am authorized to provide this certificate to you for and on behalf of the Borrower.

2. This certificate applies to the [fiscal quarter/fiscal year] ending _________________.

3. I am familiar with and have examined the provisions of the letter agreement (the "Agreement") dated ___________________________, 20___ between the Borrower and Alberta Treasury Branches ("ATB"), as lender, and the Security Documents provided in connection therewith, and have made reasonable investigations of corporate records and inquiries of other officers and senior personnel of the Borrower and of any Guarantor. Terms defined in the Agreement have the same meanings when used in this certificate.

4. No event or circumstance has occurred which constitutes or which, with the giving of notice, lapse of time, or both, would constitute a breach of any covenant or other term or condition of the Agreement or the Security Documents and there is no reason to believe that during the next [fiscal quarter/fiscal year] of the Borrower, any such event or circumstance will occur.

OR

We are or anticipate being in default of the following terms or conditions, and our proposed action to meet compliance is set out below. Description of any breaches and proposed action to remedy: ______________________

5. The Debt Service Coverage Ratio is ______, being not less than the required ratio of ______. The detailed calculations of the foregoing ratio are set forth on the addendum annexed hereto and are true and correct in all respects.

6. The rent roll and operating statement of income and expenses for the Property for the period noted in section 2 above is attached hereto. The operating statement of income and expenses has been prepared by an individual with a professional accounting designation and in accordance with CICA standards, and the information provided is consistent with that reflected into the financial statements of the Borrower or Guarantor, as the case may be, in all respects.

7. There have been no changes to the tenants or lease revenues from the previous period, except as set out below: ___________________________________

This certificate is given by the undersigned officer in his/her capacity as an officer of the Borrower without any personal liability on the part of such officer.

Dated this _____ day of _____________, 20___.

_____________________________________

|Per: | |

|Name: | |

|Title: | |

| | |

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